BILL NUMBER: AB 2456	CHAPTERED  09/29/00

	CHAPTER   897
	FILED WITH SECRETARY OF STATE   SEPTEMBER 29, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 28, 2000
	PASSED THE SENATE   AUGUST 31, 2000
	PASSED THE ASSEMBLY   AUGUST 31, 2000
	AMENDED IN SENATE   AUGUST 31, 2000
	AMENDED IN SENATE   AUGUST 14, 2000
	AMENDED IN ASSEMBLY   MAY 26, 2000

INTRODUCED BY   Assembly Member Wright
   (Coauthor:  Assembly Member Honda)
   (Coauthors:  Senators Alarcon, Johnston, Karnette, McPherson,
Ortiz, and Vasconcellos)

                        FEBRUARY 24, 2000

   An act to add and repeal Chapter 27.1 (commencing with Section
24230) of Part 13 of Division 1 of Title 1 of the Education Code,
relating to state teachers' retirement.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2456, R. Wright.  State teachers' retirement:  retirement
option program.
   The State Teachers' Retirement Law prescribes service retirement
benefits for members of the Defined Benefit Program of the State
Teachers' Retirement Plan which benefits are paid in the form of a
monthly allowance.
   This bill would establish a Retirement Option Program that would
allow members of the Defined Benefit Program to elect to receive a
lump-sum payment and a reduced monthly allowance, as specified.  The
bill would direct the board of administration of the system to
implement the program no later than January 1, 2002, except as
specified.  The bill's provisions would be repealed on January 1,
2011.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Chapter 27.1 (commencing with Section 24230) is added
to Part 13 of Division 1 of Title 1 of the Education Code, to read:

      CHAPTER 27.1.  RETIREMENT OPTION PROGRAM

   24230.  This chapter shall be known and may be cited as the
"Retirement Option Program."
   24231.  The Retirement Option Program is hereby created to add
flexibility to the system.  It provides members who elect to
participate in the program access to a lump-sum payment and a reduced
monthly retirement allowance.
   24232.  The design and administration of the Retirement Option
Program shall conform with the applicable provisions of Title 26 of
the United States Code and the Revenue and Taxation Code.
   24233.  If any provision of this chapter or application thereof to
any person or circumstance is held invalid, that invalidity shall
not affect other provisions or applications of this chapter that can
be given effect without the invalid provision or application, and to
this end the provisions of this chapter are severable.
   24234.  The board shall implement the Retirement Option Program
pursuant to the provisions of this chapter no later than January 1,
2002, unless the board determines, by resolution, that the
implementation tasks cannot be completed until a later date, in which
case the board shall implement the program pursuant to this chapter
no later than January 1, 2003.
   24235.  The board may adopt regulations to implement the program.

   24236.  A member who retires for service on or after January 1,
2002, and who has reached normal retirement age may elect, on a form
prescribed by the system, to receive a lump-sum payment and an
actuarially reduced monthly allowance pursuant to this chapter in
lieu of the monthly allowance that would otherwise be payable to the
member pursuant to Chapter 27 (commencing with Section 24201).
   24237.  (a) A member who makes the election described in Section
24236 shall receive a one-time, lump-sum payment in an amount that
equals or does not exceed the lesser of the following amounts:
   (1) The actuarial present value of the difference between (A) the
monthly allowance payable to the member pursuant to Chapter 27
(commencing with Section 24201), and (B) an amount equal to 2 percent
of the member's final compensation multiplied by the number of years
of credited service and divided by 12.
   (2) Fifteen percent of the actuarial present value of the monthly
allowance payable to the member under Chapter 27 (commencing with
Section 24201).
   (b) Notwithstanding any other provision of this part, a member who
makes the election described in Section 24236 shall receive a
monthly allowance, pursuant to Chapter 27 (commencing with Section
24201), that shall be actuarially reduced to reflect the lump-sum
amount paid under subdivision (a).
   24237.5.  The Legislature reserves the right to modify the
provisions of this chapter to further the objective of permitting
eligible members to receive a lump-sum distribution of a portion of
their benefits, with a corresponding actuarial reduction in their
monthly allowance, such that there shall be no net actuarial impact
to the Defined Benefit Program.
   24238.  This chapter shall remain in effect only until January 1,
2011, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2011, deletes or extends
that date.
